There is no question about it that people are more familiar with Real Estate than any other product or commodity.
These transactions involve either renting, selling or borrowing against the real estate. To conduct these transactions, there are primarily three kind of legal instruments; they are more particularly described as Deed, Mortgage and Lease.
These primary legal instruments have further auxiliary instruments such as:
- Assignment: Transfer of any real estate related right
- Chattel Mortgage: Mortgage on personal property
- Construction loan: Interim financing during the course of construction
- Contract of sale / Agreement of Purchase And Sale: Agreement of Purchase and sale defining the terms and all essentials of the sale
- Deed: Instrument conveying the title or an interest in real estate
- Deed of trust / Escrow: Conditional execution and deposit of a written instrument
- Estoppel certificate / Status certificate: A written instrument that may limit the responsibility of the parties involved and also the rights of third parties. It may be used to verify the status of the property such as its mortgage and in case of a condominium the operational, legal and financial dimensions of the condominium corporation.
- Extension agreement: An instrument that extends the terms of the agreement
- Installment contracts: An instrument that stipulates periodic payments by the buyer for securing the deed of a property.
- Lease: An instrument that binds the lessee and the lessor of for a stated period of time.
- Mortgage: An instrument that secures the interest of the lender in the subject property
- Mortgage bond / Note / / An Instrument that with a promise to Pay:
- Option on real estate: An instrument that gives option to the buyer or the lessee to exercise certain rights relating to buying or leasing of the subject property
- Release from the current contract: An instrument that releases one or both parties from a previously signed agreement.
- Subordinate agreement to any of the foregoing instruments: An instrument that makes the prior lien a secondary lien.
- Title policy or title insurance: An insurance policy that guarantees the title of a property
These instruments may have different names in different countries and languages but almost all of the legal instruments can be categorized in one of the above stated categories.
Contracts involving real estate should be in writing; a verbal contract may not be a valid contract and also it may be difficult to enforce. Unless you have academic training or experience, you must seek the help of a professional while preparing or signing any one of these documents.
